Top-tier sports IPs are quietly undergoing a collective role shift: transforming from investment targets to investors.

In the past, sports IP holders often appeared as investment targets, but now, investment and financing data show that top-tier sports IP holders including the NFL, Australian Open and US Open are stepping into the role of investors or investment platforms. The latter two labels are becoming increasingly prominent, and can more accurately describe forward-looking modern sports clubs.

The most valuable added value of a team is never just about money. Writing checks, offering advice and connecting resources are all things that wealthy investors can basically do. But sports leagues like the NFL, the Premier League and the Australian Open can directly present a company's name and products to tens of thousands of on-site fans, and reach millions of household audiences through live broadcasts, a capability that very few people possess. It is these capabilities that make sports teams good assets, and also make them good investors.

01

The players cannot get a share of this profit

As the richest sports league in the world, all corporate partners of the NFL obtained cooperation opportunities by paying cash before 2013. The NFL came up with an idea: why not let teams set up an independent entity to capitalize their commercial influence and ecological resources into equity? In this way, the league can better control the value it creates for external entities, and expand the scope of potential partners, no longer limited to those who are willing to pay the most cash.

32 Equity was launched. In 2013, the fund was started with an initial seed capital of 32 million US dollars. Later, NFL owners added 64 million US dollars in 2019, and another 160 million US dollars in 2022, bringing the total size to 256 million US dollars at that time.

Thirteen years on, while the fund's investment scale has continued to grow, its investment pace has slowed down. The slowdown is not due to a lack of opportunities, but because the size of the existing fund cannot support greater ambitions. Today, NFL owners are trying to figure out how a small investment fund that usually issues seven-figure checks can integrate into a football business that will generate about 25 billion US dollars in revenue this season.

According to Sportico, citing multiple people familiar with the league's internal decision-making, the NFL is currently in negotiations with multiple potential partners to establish a new, larger fund. The fund will use capital from team owners and other sources to enable the NFL to make bolder investment decisions. Reportedly, this new fund will allow the NFL to participate as a general partner, so that team owners can not only obtain the returns brought by investment, but also share the risk returns generated by investment. This will become a new source of revenue for the league.

The fund also has an attractive feature: its profits are distributed by the team owners themselves, without the need to share with the players. In other words, the players cannot get a share of the profits earned.

The investment portfolio of 32 Equity includes enterprises that are closely related to the NFL and its operations, as well as some enterprises with slightly lower relevance. But early investments have one thing in common: the fortunes of these companies will be directly improved by the league's participation. Take one of its earliest moves as an example: it restructured hospitality and ticketing company On Location in 2015. This deal was spun off from the league, ensuring that On Location obtained long-term Super Bowl authorization and access to thousands of tickets for the most prestigious events in American sports. On Location has continued to expand since then, extending its business to events such as the World Cup, the Olympic Games and March Madness.

Other leagues have followed suit and set up their own investment divisions. The NBA has its own equity investment platform, which has invested in startups such as Nextiles and Sorare; MLB has invested in Jomboy Media; the emerging venture capital division of MLS holds shares in companies such as Sorare, SeatGeek and Fanatics. However, none of these investment divisions can match the scale of the NFL.

This means that leagues that control scarce attention, data and commercial rights can do more than just charge a fee as a sales channel — they can own the equity of other companies that these assets are converted into.

02

The first venture capital platform of Premier League clubs

Beyond league-level platforms, clubs are also entering the market in their own ways. According to Sports Business Journal, Premier League club Tottenham Hotspur Football Club launched a venture capital platform called Hotspur Labs in September, operated in partnership with The Players Fund, the world's largest athlete-led venture capital platform.

The Players Fund has a dedicated division called TPF Labs that provides startup infrastructure support for sports-related projects, helping clubs screen early-stage projects and build investment frameworks. Previously, TPF Labs partnered with Como 1907 to launch a new venture capital platform and participated in the development of the latest version of Juventus' innovation platform.

For this newly launched investment platform, Tottenham Hotspur also cooperates with TPF Labs. Hotspur Labs usually supports companies from the seed round to Series A round, with each investment amount ranging from 50,000 pounds to 300,000 pounds. Tottenham Hotspur usually provides access to team assets and internal systems in exchange for cash, equity, a combination of both, or neither.

Tottenham Hotspur is the first Premier League club to launch such a program. The club's CRO Ryan Norys pointed out that in the future, areas such as athlete performance optimization and other data application-related fields may become key focus directions.

03

Be a customer first, then be an investor

In addition to leagues and clubs, event organizers have also established their own investment platforms. As the official venture capital arm of the Australian Open and Tennis Australia, AO Ventures provides capital, global platforms and networks to help startups that are reshaping the sports, entertainment, media and health industries build reputation and accelerate their commercialization. This 40 million US dollar fund will make early-stage investments in about 20 startups from all over the world.

AO Ventures is relatively generous, stating that its investment amount usually ranges from 300,000 US dollars to 1.5 million US dollars, with initial investments mainly made in the seed and Series A stages, and additional funds reserved for subsequent financing rounds. AO Ventures usually does not lead the financing rounds, but acts as the second or third largest investor to co-invest with well-known venture capital firms. This can not only expand the scope of cooperation, but also enhance its influence.

AO Ventures' first tranche of capital was invested in four companies: Bolt6 (UK), an electronic calling technology company; Raven Controls (Scotland), a software platform for real-time event management and large venue operation coordination; and two companies involved in the fast-growing padel sport, Mindspring Padel (Belgium) and Padel Haus (US).

The core model of this investment platform is "be a customer first, then be an investor". AO Startups is a pilot program, and AO Ventures is the investment institution, with the former screening projects for the latter. To verify whether these companies are worth investing in, AO Startups will first test and operate the technical solutions in real competitions at the Australian Open as a pilot project. In other words, only startups that pass the verification are eligible to obtain funding from AO Ventures.

The Australian Open has strengthened the application of artificial intelligence and emerging technologies in actual competition scenarios this year. The latest batch of members to join AO StartUps includes Aircast, Outcoach, truefuels, VueMotion, RootNote, Bettercup, Bronco, the National Pickleball Association of Australia and CRED.

"The biggest challenge for any startup is how to gain market recognition. By leveraging the strengths of Tennis Australia, we can help these companies enhance their market credibility, build reputation and increase revenue. Ultimately, aligning interests through investment can also improve our returns," said Craig Tiley, former CEO of Tennis Australia.

Compared with AO Ventures, USTA Ventures launched by the United States Tennis Association (USTA) came earlier. Founded in 2023, USTA Ventures focuses on acquiring equity in technology-related enterprises, targeting investments in technology companies and enterprises that help promote the development of tennis in the United States in exchange for equity. In 2024, the fund's first investment went to tennis technology company PlayReplay. The company has an electronic line calling system that provides more accurate and easy-to-use line calling services for juniors, adults and amateurs, helping to increase the popularity of tennis across the United States.

William McGugin, Chairman of USTA Ventures, also serves as the CEO of private equity firm Iroquois Capital Group on a daily basis. He believes that the ultimate goals of different types of investments vary greatly: Iroquois Capital pursues the highest possible financial returns, while the USTA pays more attention to whether a startup can widely increase tennis participation across the United States.

The millions of dollars in returns these sports leagues generate from their investments are far less than their revenues from core businesses, and they are more about laying out for the future.

04

Players are not just brand ambassadors, but also investors

Not just teams and leagues, investment institutions are also starting to seek cooperation with athletes.

According to a Tech Crunch report on September 10, Collaborative Fund, a venture capital firm with about 1 billion US dollars in assets under management, acquired a partial stake in D.C. United and its home stadium Audi Field. Founder Craig Shapiro calls sports clubs the "ultimate consumer product", whose stadiums provide a display platform for the firm's investment portfolio. He believes that D.C. United's status as one of the original clubs in Major League Soccer allows affiliated companies to access an institutional fan base that has been established for decades.

According to the official website of Patricof Co, L Catterton, a private equity firm backed by LVMH, and investment platform Patricof Co launched the 500 million US dollar CHAMP Fund this year, of which nearly 60 million US dollars came from more than 250 athletes. Patricof Co originally helped athletes expand their connections and access educational opportunities, and brought them potential investment opportunities that fit their interests and values. Founder Mark Patricof said: "We believe that the effectiveness of athlete investors far exceeds that of brand ambassadors."

The CHAMP Fund confirms Patricof's point: athletes are driving all aspects of modern culture, and their participation can bring better transaction terms and higher investment returns.

Sports assets are never short of attention, even more than they can digest. By turning sports platforms into springboards and incubators for other enterprises, sports assets can convert this social influence into new sources of returns.

This article is from the WeChat official account "Lanxiong Sports" (ID: lanxiongsports), written by Huang Yi, and published with authorization from 36Kr.